Exports booming for Shrewsbury lubricants business
One of Europe’s leading independent oil blenders and marketers, Morris Lubricants, is enjoying an export boom as demand for its Union Jack branded products has grown by 40 per cent in the past year.
Exports to 85 countries worldwide now account for more than £15 million of the Shrewsbury-based company’s £50 million turnover and this figure is expected to rise further following the launch in April of a new business interest in India.
Paterson Lubricants India Pvt Ltd is a fully owned Indian subsidiary of Morris Lubricants and aims to establish the company’s presence in the huge automotive and motorcycle markets in India through distribution partner George Oakes Ltd, which has 35 branch offices in the country.
Lubricants are manufactured in India to the company’s tried and tested formulations. A possible future option could see the company establish its own manufacturing facility to further develop the Indian market, as the country’s economy is expected to continue to grow rapidly.
In addition to India, Morris Lubricants has begun exporting to Russia, Italy, Vietnam, Mongolia and Azerbaijan in the past trading year and the company’s international business continues to grow across traditional territories in Europe, the Middle East, Far East, Australasia and North America.
Managing director Andrew Goddard, a fifth generation descendant of company founder James Kent Morris, who established Morris Lubricants in Shrewsbury in 1869, is excited by the booming export market. But he says the past year has been one of the most challenging he can remember, due to fluctuating currency exchange rates in the wake of the recent Brexit vote and the General Election.
“The new Indian business was set up to gain entry to what we hope will be a very lucrative market,” he explained. “From the outset, it was apparent that we wouldn’t be able to achieve our goal by exporting directly from our bases in the UK.
“We needed to find an alternative, which is why we established a wholly-owned business trading in India through an established distributor network. We decided to produce a dedicated automobile and motorcycle product range to meet the specific performance requirements of the Indian marketplace.
“It is an enormous growing market. To put it into perspective, there are 18 million new motorcycle registrations every year.
“The Indian Government is encouraging inward investment, they are spending a huge amount on the country’s infrastructure and are really focused on developing India as an economic powerhouse, and our involvement will soon become an integral and important part of our company’s future.”
He revealed that Morris Lubricants is facing a major challenge to manage the growing demand for the company’s products, with export volume alone up 30 per cent this year.
He attributes the export boom to a combination of the reduced value of Sterling against other major global currencies, a greater awareness worldwide of the quality of Morris Lubricants’ products due to the work of the company’s sales and marketing teams, and an exceptionally high level of customer service, which is paramount to the business.
He also maintains that branding all the company’s products with the Union Jack exudes an impression of quality, tradition and professionalism.
“We are growing our business in the UK as well, but the greatest growth is from exports,” added Mr Goddard, who has taken on six new staff in the past year, including two in the export team, which is led by Stephen Dawe, group international business director and director of the Indian organisation.
Mr Dawe believes a personal service and a friendly customer focus makes the company stand out and win friends around the globe. “We don’t have to rely on answer-phones or automated messages in the export department,” he said. “Our customers speak to real people who give a fast and accurate response, thereby allowing us to quickly build strong, long-lasting customer relationships.
“Many of our customers tend to be big characters who appreciate a little bit of humour in the way we do business. Product integrity, of course, is also of critical importance and Morris products are of the highest possible quality.”
However, the increased exports have brought extra demand for space to store orders prior to despatch. That’s why the company has recently purchased premises adjacent to its Shrewsbury manufacturing plant, which may well be supplemented by further warehousing developments in the not too distant future.
Further investment will see £250,000 spent on a brand new small pack filling line at the Shrewsbury plant.
Turning to Brexit, Mr Goddard said: “Undoubtedly some of the benefits we are seeing in volume growth are down to the impact of Brexit and the weakening of the Sterling Pound. Who knows how long that is likely to continue, but we have laid solid foundations and are confident of being able to retain the current level of business going forward, even if exchange rates become less favourable.”
He is hoping that the UK leaving the European Union does not result in a change to export tariffs, which would have a tendency to make the company’s products uncompetitive in Europe. However, he also sees great opportunities to develop new trade deals with other countries outside of Europe now the decision to leave the EU has been made.
“The worst case scenario would be to be cut-adrift on our own and subsequently see exchange rates plummet further,” he added. “Most of the products that we manufacture in Shrewsbury use materials imported from the EU and our costs have risen significantly in the last 12 months because of Brexit, which has obviously had a detrimental effect on profits and margins.
“The uncertainty is not good for business but all we can do is manage the situation as it exists. Every UK blender is in the same position, but most of our major competitors no longer manufacture in the UK, so they have an advantage.
“It has probably been one of the most difficult years I can remember in managing our business, because there were so many variables with which to contend and most of them are far outside our control.
“Our volumes have risen rapidly, but because of issues such as the exchange rate, we have needed to manage the business very carefully. We don’t want to be in a situation where we are busy fools, but we also don’t want to price ourselves out of the market. That’s the conundrum we have had to face.
“UK businesses are having to react to the fluctuating effects of currency trading and whereas 10 years ago, 75 per cent of our purchases were in Sterling, now it’s more like 10 per cent, as the US Dollar and Euro are our main currencies.”
With its 150th birthday just 18 months away, Morris Lubricants is already planning special celebrations. Watch this space!
Morris Lubricants, which has a workforce of 210, sells more than 800 product lines, including the latest auto and motorcycle lubricants technology for modern engine and transmission designs, as well as tailored grades for the traditional classic, veteran and vintage vehicle market.
Industrial metalworking fluids, specialist production lubricants and biodegradable lubricants complete a product portfolio to fulfil the needs of automotive, industrial manufacturing, agriculture, horticulture and forestry.
The company produces lubricants that can operate in the most extreme climates, ranging from the freezing temperatures of the Arctic Circle to the searing heat of the Australian Outback.